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Author Topic: Leverage Isnít a Bad Thing  (Read 918 times)
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Analyst75
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« on: Wednesday, August 05, 2015 - 23:27 »

ďThe point [is] that a trader has to master their psychology to allow him or her to take many small losses, trade through drawdowns, and let winners run beyond expectations.Ē - Markham Gross 

Some people preach against leverage because of their own faults. They use trading methodologies that ultimately make average losses that are bigger than average profits, while they should be doing the opposite. While we may find it difficult at first (the same was true of me), controlling losses and making trading decisions become very easy when they become our nature.

In order to know what leverage is in trading, plus the advantages in using it, please search for the information yourself. However, experienced traders should understand what leverage is. Leverage isnít a bad thing- itís irrational use of leverage thatís a bad thing.

So I recommend the use of leverage. When leverage is used with strict money management, a heartwarming balance is then found between decent profits and risk control. For example, I use a leverage of 1:100. However, I risk only 0.25% per trades: which means that I use only 0.01 lots for a $2000-account, with a stop of 50 pips per trade.  With an account thatís less than $2000, Iíll recommend conversion to cents, for greater safety.

The greatest achievement in trading is controlling the treacherous statistics called drawdowns, not making profits, for profits are easy to make but difficult to retain. For example, if you made a profit of 10% in this month, you could start experiencing losses in the first and/or the second week of the next month (as itís true of any trading approach you might adopt). A proof of your proficiency then lies in your ability to lose as little money as possible, going down by, say, 2% - 4% maximum. With this, itís easier for you to bounce back when the strategy enters another encouraging winning streak. However, a bad trader would lose between 10% - 40% or even more, during such transitory losing streak. Whatís the benefit of gaining 20% this month and losing 55% next month?

Itís a good thing to help our friends and well-wishers to be the best they can be in their trading careers Ė hence my articles. Directly or indirectly, we benefit when our friends and acquaintances when they become successful. If your friend doesnít become a king, you wonít become a friend of a king.

The quote below ends this piece:

ďThe problem is adjusting expectations so that your psyche survives long enough for you to be around when the big winner appears. The majority of traders quit simply because expectations and reality are out of alignment.Ē Ė Chris Tate
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I simply copy profitable trades on Tallinex.com. Trading with peace of mind.
Waylay Dave
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« Reply #1 on: Friday, September 22, 2017 - 18:53 »

That's quite a nice article you have shared in here, thanks for sharing it here, and keep sharing such an informative posts.
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Michaelkessy
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« Reply #2 on: Saturday, October 07, 2017 - 20:20 »

Correct. A high leverage offers the trader the chance to gain a lot of profits, but at the same time, do not forget that by leveraging, you concentrate all your deposits into a few lots so that a loss willl have greater and far-reaching consequences.
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I recommend trying trading bot for profitable investments
Waylay Dave
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« Reply #3 on: Wednesday, October 11, 2017 - 05:24 »

Leverage isn't a bad thing for the experienced and well trained traders, for a newbie it would just be like a double edged sword, hence they have to be very much careful.
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